How do you handle the effects of Black swan events? How 12 small businesses succeeded when their communities suffered economic crisis
Small businesses are fragile. A single unexpected event can often spell disaster for them, and watching the documentary “The Black Swan” should certainly be included in every budding entrepreneur’s study schedule!
Every company tries to look beyond the things that can help their business. We try to optimize for something. To name just two examples, some small businesses prioritize profit maximization (the best case), but others may strive for freedom from third parties or have created a product which solves a major issue. The majority of entrepreneurs hope that everything will work out as expected and go as planned.
Then the unpleasant happens, running into a crisis; again and again.
This year we would like to share a few events that could not be predicted, yet have major impacts on companies.
- What are black swan events?
- 5 steps how a startup and small business founder need to be ready for the next black swan event
- Summing it all up
- In a nutshell
What are black swan events?
There’s a lot of talk about Black Swan events these days. But what is a Black Swan event, and which one is coming for small business entrepreneurs?
Black swans are events that are widely considered improbable and unanticipated. They are rare, outlier events, but when they occur, it can be a game-changer. In our current age, with so many dramatic changes happening every day, it’s impossible to predict what the future may hold.
Why? Because a typically, Black Swan event can be the result of a number of factors, from a natural disaster, economic conditions, changes in legislation, sudden discoveries, to a political event.
The swans can create a major dilemma for the company. While they are not always easy to deal with, black swan events can be extremely beneficial for companies if they are handled correctly.
The Legals: The information contained in thextraordinarionly.com or shared by ThExtraordinariOnly is for general information or entertainment purposes only and does not constitute professional financial advice. The internet changes so fast that one year online equals about five years in the real world. Do a thorough research. Please contact an independent financial professional for advice regarding your specific situation.
Black swan event meaning
A black swan is a highly improbable event with three principal characteristics: It is unpredictable; it carries a massive impact; and, after the fact, we concoct an explanation that makes it appear less random, and more predictable, than it was. The astonishing success of Google was a black swan; so was 9/11.
Do we know which Black Swan event is coming for small business entrepreneurs? Hang on to the end of this blog post – we’ll find out.
The term was coined in the 2007 book “The Black Swan: The Impact of the Highly Improbable” by Nassim Taleb, which is one of the defining books in the field of risk. Nassim explains that black swans underlie almost everything, from the rise of religions, to events in our own personal lives with major consequences.
By the time these black swan events happen, they are an inevitable outcome.
This article will cover the basics of a Black Swan event and how businesses should prepare for it.
20 Black Swan event examples
Black Swan events are events so surprising, so unpredictable, and so far outside the realm of typical expectations that they have the potential to upend the entire global economy.
In the last few centuries, there have been a number of black swan events – moments in history that were completely unexpected and had a major impact on the world. Here are 20 of the most notable black swan events in history:
- The fall of the Berlin Wall was one of the most significant moments in recent history, which led to the end of communism in Eastern Europe
- 9/11 terrorist attack shocked the world and changed global politics forever
- The discovery of America is an event that had huge repercussions for both Native Americans and European settlers
- The invention of gunpowder revolutionized warfare and led to major changes in society
- Napoleon’s defeat at Waterloo ended his reign as one of history’s greatest military leaders
- The Black Death was a devastating pandemic that killed millions across Europe
- The Battle of Gettysburg, a turning point in the American Civil War
- The Russian Revolution Of 1917
- The first successful powered flight by Wright brothers
- Hitler’s invasion of Poland, which started World War II
- Japan’s attack on Pearl Harbor
- Atoms split
- Neil Armstrong, becoming the first man to walk on moon
- End of apartheid In South Africa
- Invention of the Internet
- First test tube baby
- Collapse of Soviet Union
- Artificial Intelligence
- Election of Barack Obama As 44th President of the United States
However, in the realm of business, there is one type of Black Swan event that small businesses should be aware of: the adoption of artificial intelligence in the workplace.
As artificial intelligence becomes more prevalent in the workplace, small businesses need to be aware of the potential impact on their operations. AI can help businesses automate tasks, improve decision-making, and boost productivity.
However, it can also result in job losses as automated systems replace human workers. Businesses should consider how AI will impact their workforce and make sure they are prepared for the changes that may come.
Are you prepared for the next black swan event?
5 steps how a startup and small business founder need to be ready for the next black swan event
As a small business entrepreneur, you need to be ready for anything that comes your way. This spectacular black swan event that can have a significant impact on a company’s business. One thing that we can do to prepare for these unexpected outcomes is to have a plan in place with steps to take in the event of a crisis.
Here are seven steps to help you prepare for the next big thing:
- Keep an eye on current events. What’s happening in the world around you? This can give you clues as to what might happen next.
- Be flexible in your plans. Don’t get too attached to any one plan or idea – be willing to pivot if necessary.
- Stay calm under pressure and don’t panic when things change unexpectedly – this is when mistakes are made!
- Be patient and take your time making decisions – rushing into things can lead to problems down the road.
- Have a contingency plan (or two) in place for different potential scenarios – this will help you be prepared no matter what happens.
- Keep learning and expanding your knowledge so that you’re always ahead of the curve
At last, do you trust your gut instinct? Is it often right?
The rise of small businesses after suffering economic crisis
When your community is facing or going through a Black Swan induced economic crisis, it can be hard and difficult to keep your small business afloat.
However, there are many examples of small businesses that not only survive but thrive during tough times and manage to succeed despite the challenges.
Here are 12 of them:
- The local grocery store started a food bank for families in need.
- The coffee shop that gave free cups of coffee to first responders working long hours.
- The thrift store that started offering free clothes to those who couldn’t afford them.
- The hardware store that offered discounts to people who were out of work and needed tools for home repairs.
- The pet store that set up an adoption center for abandoned animals from the shelters.
- The daycare that provided care for essential workers’ children at no cost
- The spa that offered discounted services for health care workers.
- The restaurant that served meals to the homeless population in their area
- The clothing boutique that held fashion shows and donated proceeds To charity
- The bookshop that hosted story time and waived late fees for overdue books.
- The gym that offered free memberships to unemployed individuals.
- And lastly, the list wouldn’t be complete without mentioning the countless other businesses who found ways to give back and help their communities in times of need!
Black swan event stock market 2023
It’s that time of year again! The stock market is on everyone’s mind, and small business entrepreneurs are no exception. We all want to know what the future holds for our businesses, and one of the biggest questions on everyone’s mind is: What will happen in 2023?
The short answer is: no one knows. But that doesn’t mean we can’t have a little fun with it. Here are some predictions for what might happen in the stock market crossing over from 2022 to 2023, courtesy of your friendly neighborhood small business entrepreneur:
- The “Black Swan” Event: Just when you thought it was safe to invest again, something totally unexpected happens that sends shockwaves through the markets. No one knows exactly what will trigger this event, but be prepared for anything!
- The Return of volatility: After several years of relative calm, volatility makes a comeback with a vengeance. Stock prices swing wildly from day to day, leaving investors feeling dizzy and nauseous.
- The rise of new markets: With traditional markets becoming increasingly unstable, investors start looking for alternatives – and they find them in places like Africa and Asia. These regions offer high potential returns, but also come with higher risks. So do your research thoroughly, if you’re thinking about investing here!
- 5G becomes ubiquitous: This next-generation wireless technology finally reaches critical mass, transforming how we live, work, play, and learn. Sound familiar — TikTok?
- Everything gets connected – including your fridge, as 5G opens up a whole new world of possibilities (and profits) for early adopters.
3 best ways to prepare for black swans in 2023 and beyond
Remember, a black swan event is an event with a very low probability of happening but which has the potential to have a large impact. In finance and investment, the term describes an event with a return significantly different from the market average because it is not predicted by models.
How ready are you?
- The first thing you need to do is take a deep breath and assess the situation. Don’t panic and don’t make any rash decisions – now is the time to be calm and strategic.
- Talk to your customers and find out what they need from you during this difficult time. They may be willing to support you in ways you didn’t expect – so ask them!
- See if there are any small business government programs or initiatives that can help your company during a Black Swan’s tough period. There may be grants or loans available that you didn’t know about before.
Summing it all up
Black swans are unpredictable events that can have a major impact on our lives. A Black Swan event is a rare and unpredictable event that has major consequences. The term was first coined by Nassim Nicholas Taleb in his 2007 book The Black Swan: The Impact of the Highly Improbable.
Which 3 black swans that can kill your business?
There are three black swans that can kill your business:
- The death of a key employee. This can be devastating to a small business, as it can disrupt the entire operation.
- A major customer going bankrupt. This can put a serious dent in your revenue, as well as causing problems with suppliers who may not be paid for their goods or services.
- A natural disaster damaging your premises or stock. This could put you out of business altogether, depending on the extent of the damage and whether you have insurance cover
What’s the impact of a black swan event to small businesses?
The impact of a black swan event on small businesses can be significant. While the exact nature of the event may be difficult to predict, the resulting disruption to normal business operations can be costly and devastating. As such, it is important for small business entrepreneurs to have a contingency plan in place in case their business is impacted by a black swan event.
Which Black Swan event is coming?
It’s hard to say, because they’re all so rare and unpredictable! But whatever it is, we need to be prepared for it.
In a nutshell
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- ‘Black swan’ events strike animal populations – University of Washington – College of the Environment
- Black Swan Events, Change and New Opportunity – HSC
- Preparing for a Black Swan Event – North Carolina State University
- Black Swan Events: Short-term crisis, Long-term opportunity – UTULSA
- Black Swan Events Require Expanded Thinking, Planning – Government Technology
- 6 disastrous ‘black swan’ events that could happen by 2030 – Insider
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